Tangential Musings about Enterprise IT…

The beginning of Apple’s slow demise has started

Let’s be clear: I’m a big Apple fan. I have been since I was a teenager and I was first exposed to the Macintosh Plus. I’ve been enthralled by their focus on both design and functionality, sometimes without concern to profit, and of the tale of a company that almost went bust, a few times – and then turned into the most valuable company in the world.

But what goes up must come down and I believe that 2012 signaled the beginning of the end for Apple. This won’t happen for some time yet, because they are producing by far the best consumer electronics in the world. But here’s 5 reasons – and countermeasures.

Apple products are just too good.

This sounds like a stupid thing to say, but I own an iPhone 5, iPad 3 and MacBook Pro and they are (almost) the only consumer electronics I use. Each of these devices is almost perfect. Each device is lighter, faster, has better screens and longer battery life than its predecessor.

I love the longer screen on the iPhone 5, the Retina display of all devices and the fact that Apple (finally) ditched the DVD drive. They work seamlessly together and I never leave home with a charger when I go out for the day. They almost never crash.

But with this operational perfection comes a lack of innovation and a lack of soul. I don’t care what the next new thing is, and I’m not sure that it’s NFC, but Apple should be creating it. Apple should be edgy and shouldn’t be afraid to have a product which isn’t perfect. Innovation means taking risks and means cannibalizing your own market.

Let’s take a simple example of why this doesn’t make sense. In the iPhone5, the cost of 16GB is $10, 32GB is $20 and 64GB is $40. In addition, the cost of an iPhone 4/4S/5 is barely any different. So Apple has a total of 10 models with barely any variance in cost, and a huge variance in retail price.

This might be good for Apple’s coffers but it’s not good for customers. When Jobs came back to Apple he drew a matrix of 4 machines: one desktop, one laptop. One home, one professional. Apple should slash and simplify product lines and get back to where it came from.

Reliance on two aging Operating Systems – OS X and iOS

Apple just put user experience under Jony Ive, who has been charged with creating a unified experience between desktop and mobile systems. The benefit is clear and it’s great in many ways. With each release, the laptop, tablet and phone experience becomes more similar and more intuitive.

The problem is simple: Microsoft, in particular, has created a system which operates how people think, in Windows Phone 8. The live tiles and stream-of-consciousness feeling of Microsoft’s system is the way of the future, and Google’s Android has mimicked this with Google Now.

But Apple, especially with iOS, has a system which creates walled gardens of apps, which you have to switch between. Integration between apps is minimal and you have a sense of being in a hallway with rooms, rather than a stream of consciousness.

Based on the design of iOS and OS X, Apple will never (in my estimation) ever solve this. Instead, they should now start writing the replacement to these two systems, to be released in 5 years. Don’t wait until you’re Windows ME before you create real change.

To innovate you must look out, not in

I don’t believe Apple has really innovated in the last 3 years. Ever since the released of the iPad in 2010, Apple has been obsessively making what it has better. As I said before, this has turned into the best and most polished consumer products ever made.

But the iPad Mini is a horrible example of what happens when you start innovating based on your competitors. It is a defensive play against Google’s superior Nexus 7, and horrible. It’s an iPad 2 in a smaller case, and Apple is capable of so much more, with its purchasing power. I hope they throw it out and start again.

And it is the case with everything they released this year, down to the beautiful new iMac with its impossibly thin edge. Beautiful, better, but not innovative. Apple may prove me wrong by reinventing a new market like the consumption of media, and the Apple TV would be a good place to start.

Charity begins at home

America’s Fiscal Cliff has gained huge global attention, and I believe it will cause a change in taxpayers behavior over the next few years. There will be an understanding that outsourcing manufacturing to other countries (usually China, in Apple’s case) is outsourcing jobs that could be performed in the local market.

When you combine the need to reduce government spending, an increased national debt and Apple’s $41bn profit in fiscal year 2012, I believe that consumers will start to mount pressure to move jobs back into the USA.

There is a sense that Tim Cook knows this already, as he is moving iMac production back to the USA – which is no doubt an attempt to put his toe in the water. There is a sense that with the inflation rates in China, combined with worker productivity, this may be a great plan all around.

Final Words

You may notice that I didn’t moan about the Apple Maps debacle. Such mistakes are human and Apple Maps gets better each day. I’m sure that Tim Cook is already all over creating rich apps that can compete with the quality of Google’s content.

What Steve Jobs, Tim Cook and Jony Ive have done with Apple is amazing, but there are warning signals that Apple has become an amazing company for supply chain and operations rather than a true innovator. And if that is the case, they will fall to the same fate befell that Nokia and Motorola. Good luck Apple!

I think Tim Cook is smart enough to consider that the combination of inflation in China, cost of transport, cost of oil and worker productivity means that for large devices, it may make financial sense to manufacture or assemble the device where it is distributed.

If we combine this with the growing social desire to use local workforces and the potential for other large devices like the Apple TV in 2013 and I’d suspect he is testing the water for future products.

Not sure if he was following GE – am sure they already had that in the works.

I like the rumors I’ve been hearing about an Apple watch. I’m really curious to see how that will play out, especially with the impending release of the Pebble. I think both have a great potential for some much-needed change. If either (or both) go the way I think they will, then the phone as a device in your pocket really becomes irrelevant. You won’t need to take it out of your pocket to read a text message, take a call, or check the temperature. You can put it in your pocket in the morning and leave it there all day.
It will be very interesting to see how each develops. I’m sure the one from Apple will be very tightly integrated, but the Pebble excites me because it comes from the outside, and perhaps will surprise us in some unexpected ways.